EXHIBIT 2
SECOND AMENDMENT TO
AGREEMENT TO MERGE
AND PLAN OF REORGANIZATION
THIS SECOND AMENDMENT TO THE AGREEMENT TO MERGE AND PLAN OF
REORGANIZATION (the "Second Amendment") is entered into as of August 3, 2001,
among Mid-State Bank & Trust, a banking company organized under the laws of
California ("BANK"), being located in Arroyo Grande, California, Mid-State
Bancshares, a corporation and registered bank holding company organized under
the laws of California ("ACQUIROR") located in Arroyo Grande, California,
Americorp, a corporation and registered bank holding company organized under the
laws of California ("TARGET") located in Ventura, California, and American
Commercial Bank, a banking company organized under the laws of California
("TARGET BANK"), located in Ventura, California.
WHEREAS, Acquiror, Bank, Target and Target Bank entered into an
Agreement to Merge and Plan of Reorganization dated as of April 9, 2001 as
subsequently amended on May 24, 2001 (as so amended, the "Agreement");
WHEREAS, the Parties wish to make certain changes and amendments to the
Agreement which they believe to be in the best interest of their respective
shareholders;
NOW, THEREFORE, in consideration of the premises and mutual promises of
the parties, the Parties hereto agree as follows:
1. The following definitions are hereby added to Section 1.1 or, in the
event that the definition is already contained in the Agreement,
amended in full as follows:
"`CASH PRORATION FACTOR' shall have the meaning given such term in
Section 2.7(d)."
"`EXCHANGE RATIO' means the number of shares of Acquiror Stock into
which a share of Target Stock shall be converted which shall be equal
to the amount (to the nearest ten thousandth) as set forth herein
below:
(i) If the Average Closing Price is not less than $15.15 and is not
more than $17.61, the Exchange Ratio shall be calculated by dividing
$28.75 by the Average Closing Price;
(ii) If the Average Closing Price is more than $17.61, but not more
than $18.42, the Exchange Ratio shall be 1.6335;
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(iii) If the Average Closing Price is more than $18.42, the Exchange
Ratio shall be calculated by dividing $30.09 by the Average Closing
Price; provided, however, that if Acquiror shall have entered into a
definitive agreement for a Change of Control (which definitive
agreement shall not have terminated at the Effective Time) and the
Average Closing Price is more than $18.42, the Exchange Ratio shall be
1.6335;
(iv) If the Average Closing Price is less than $15.15 but not less than
$14.00, the Exchange Ratio shall be 1.8977;
(v) If the Average Closing Price is less than $14.00, the Exchange
Ratio shall be calculated by dividing $26.57 by the Average Closing
Price subject to Acquiror's right to terminate the Agreement as set
forth in Section 10.1(g).
"`MAXIMUM STOCK AMOUNT' shall have the meaning given such term in
Section 2.7(c)."
"STOCK PRORATION FACTOR' shall have the meaning given such term in
Section 2.7(d)."
2. The definitions of "Litigation Contingencies" and "Litigation Expenses"
are hereby eliminated.
3. Section 2.7 is hereby amended to read as follows:
"2.7 ELECTION AND PRORATION PROCEDURES.
(a) An election form and other appropriate and customary transmittal
materials in such form as Acquiror and Target shall mutually agree
("Election Form") shall be mailed no less than 35 days prior to the
anticipated Effective Time or on such other date as Target and Acquiror
shall mutually agree ("Mailing Date") to each holder of record of
Target Stock as of five Business Days prior to the Mailing Date
("Election Form Record Date"). Acquiror shall make available one or
more Election Forms as maybe reasonably requested by all persons who
become holders (or beneficial owners) of Target Stock after the
Election Form Record Date and prior to the Election Deadline (as
defined below), and Target shall provide to the Exchange Agent all
information reasonably necessary for it to perform its obligations as
specified herein. Each Election Form shall permit the holder (or the
beneficial owner through appropriate and customary documentation and
instructions) to elect (an "Election") to receive either (i) Acquiror
Stock (a "Stock Election") with respect to all of such holder's Target
Stock, (ii) cash (a "Cash Election") with respect to all of such
holder's Target Stock, or (iii) a specified number of shares of Target
Stock to receive Acquiror Stock (a "Combination Stock Election") and a
specified number of shares of Target Stock to receive cash
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(a "Combination Cash Election"), subject to the provisions contained in
this Agreement. Any Target Stock (other than Target Dissenting Shares)
with respect to which the holder (or the beneficial owner, as the case
may be) shall not have submitted to the Exchange Agent, an effective,
properly completed Election Form received prior to the Election
Deadline shall be deemed to be "Undesignated Shares" hereunder.
(b) Any Election shall have been properly made and effective only if
the Exchange Agent shall have actually received a properly completed
Election Form by 5:00 P.M. Pacific Time on or before the 30th day
following the Mailing Date, or such other time and date as Acquiror and
Target may mutually agree (the "Election Deadline"). An Election Form
shall be deemed properly completed only if an Election is indicated for
each share of Target Stock covered by such Election Form and if
accompanied by one or more certificates (or customary affidavits and
indemnification regarding the loss or destruction of such certificates
or the guaranteed delivery of such certificates) representing all
shares of Target Stock covered by such Election Form, together with
duly executed transmittal materials included in or required by the
Election Form. Any Election Form may be revoked or changed by the
person submitting such Election Form at or prior to the Election
Deadline. In the event an Election Form is revoked prior to the
Election Deadline, the shares of Target Stock represented by such
Election Form shall automatically become Undesignated Shares unless and
until a new Election is properly completed and made with respect to
such shares on or before the Election Deadline, and Acquiror shall
cause the certificates representing such shares of Target Stock to be
promptly returned without charge to the person submitting the revoked
Election Form upon written request to that effect from the holder who
submitted such Election Form. Subject to the terms of this Agreement
and of the Election Form, the Exchange Agent shall have reasonable
discretion to determine whether any election, revocation or change has
been properly or timely made and to disregard immaterial defects in the
Election Forms, and any decisions of Acquiror and Target required by
the Exchange Agent and made in good faith in determining such matters
shall be binding and conclusive. Neither Acquiror nor the Exchange
Agent shall be under any obligation to notify any person of any defect
in an Election Form.
(c) For purposes of this Section 2.7, the following definitions shall
apply:
(i) "Total Consideration" shall mean the SUM of (A) the product of (1)
the Average Closing Price and (2) the number of shares of Acquiror
Stock actually issued to holders of Target Stock in the Merger, (B) the
amount of cash actually issued to holders of Target Stock in the Merger
pursuant to Cash Elections, Combination Cash Elections or as the Cash
Proration Factor (as hereinafter defined), (C) the amount of cash
actually issued to holders of Target Stock in the Merger in lieu of
fractional shares of Acquiror Stock, and (D) an amount equal to the
number of shares of Target Dissenting Shares (as to which the holder's
demand to exercise
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dissenter's rights shall not have been withdrawn as of the Effective
Time) MULTIPLIED by the greater of (1) the product of the Exchange
Ratio and the Average Closing Price and (2) the Per Share Cash
Consideration. The term "Total Consideration" shall not include, nor
shall any effect be given to, substitute options granted pursuant to
section 7.4 (b) or any cash payments pursuant to section 7.4 (c).
(ii) "Minimum Stock Amount" shall mean the lowest whole number of
shares of Acquiror Stock which, if multiplied by the Average Closing
Price, results in a dollar amount at least equal to 60 percent of the
Total Consideration.
(iii) "Maximum Stock Amount" shall mean the lowest whole number of
shares of Acquiror Stock which, if multiplied by the Average Closing
Price, results in a dollar amount equal to 70 percent of the Total
Consideration
(d) As promptly as practicable after the Effective Time, but not later
than 10 days after the Effective Time, Acquiror shall use its best
efforts to cause the Exchange Agent to effect the allocation among the
holders of Target Stock of rights to receive Acquiror Stock or cash in
the Merger as follows:
(i) If the product of (A) the aggregate number of shares of Target
Stock for which Stock Elections and Combination Stock Elections shall
have effectively been made, and (B) the Exchange Ratio, exceeds the
Maximum Stock Amount, then, to the extent necessary so that the number
of shares of Acquiror Stock to be issued in the Merger shall be not
greater than the Maximum Stock Amount and the number of shares of
Acquiror Stock to be issued in the Merger shall be at least equal to
the Minimum Stock Amount, the Exchange Agent shall make the following
allocations and adjustments in the following order:
(1) shares of Target Stock for which effective Cash Elections or
Combination Cash Elections have been made and all Undesignated Shares
shall be converted into the right to receive cash in an amount equal to
the Per Share Cash Consideration;
(2) if after applying the allocation in (1), the Maximum Stock Amount
is still exceeded, then a stock proration factor (the "Stock Proration
Factor") shall be determined by dividing (x) the Maximum Stock Amount
by (y) the product of the total number of shares of Target Stock with
respect to which effective Stock Elections and Combination Stock
Elections were made multiplied by (z) the Exchange Ratio. Each holder
of Target Stock who made an effective Stock Election or Combination
Stock Election shall be entitled to:
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(a) the number of shares of Acquiror Stock equal to the product
of (x) the Exchange Ratio, multiplied by (y) the number of
shares of Target Stock covered by such Stock Election or
Combination Stock Election, multiplied by (z) the Stock
Proration Factor; and
(b) cash in an amount equal to the product of (x) the Per Share
Cash Consideration, multiplied by (y) the number of shares
Target Stock covered by such Stock Election or Combination
Stock Election, multiplied by (z) one minus the Stock
Proration Factor.
(ii) If the conversion of the shares of Target Stock for which Stock
Elections and Combination Stock Elections shall have effectively been
made (based upon the Exchange Ratio) would not result in a number of
shares of Acquiror Stock being issued that is at least equal to the
Minimum Stock Amount (which shall be determined for this purpose on the
assumption that all shares of Target Stock [other than (A) those for
which Stock Elections or Combination Stock Elections have been made or
(B) are Undesignated Shares] would be entitled to receive the Per Share
Cash Consideration), then, to the extent necessary so that the number
of shares of Acquiror Stock to be issued in the Merger shall be at
least equal to the Minimum Stock Amount, the Exchange Agent shall make
the following allocations and adjustments in the following order:
(1) each holder of Target Stock who made an effective Stock Election or
Combination Stock Election shall receive the number of shares of
Acquiror Stock equal to the product of the Exchange Ratio multiplied by
the number of shares of Target Stock covered by such Stock Election or
Combination Stock Election;
(2) the Exchange Agent shall select by lot such number of holders of
Undesignated Shares to receive Acquiror Stock as shall be necessary so
that the shares of Acquiror Stock to be received by those holders, when
combined with the number of shares of Acquiror Stock for which a Stock
Election or Combination Stock Election has been made shall be equal to
at least the Minimum Stock Amount. If all Undesignated Shares plus all
shares as to which Stock Elections and Combination Stock Elections have
been made together are less than, and not approximately equal to, the
Minimum Stock Amount, then;
(3) a cash proration factor (the "Cash Proration Factor") shall be
determined by dividing (x) the Minimum Stock Amount (less the shares
for which an effective Stock Election and Combination Stock Election
has been made, plus all the Undesignated Shares) by (y) the product of
(i) the sum of the total number of shares of Target Stock with respect
to which effective Cash Elections and Combination Cash Elections were
made multiplied by (ii) the Exchange Ratio. Each holder of Target Stock
who made an effective Cash Election or Combination Cash Election shall
be entitled to:
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(a) cash equal to the product of (x) the Per Share Cash
Consideration, multiplied by (y) the number of shares of
Target Stock covered by such Cash Election or Combination
Cash Election, multiplied by (z) one minus the Cash
Proration Factor; and
(b) the number of shares of Acquiror Stock equal to the product
of (x) the Exchange Ratio, multiplied by (y) the number of
shares of Target Stock covered by such Cash Election or
Combination Cash Election, multiplied by (z) the Cash
Proration Factor.
(iii) If the aggregate number of shares of Target Stock for which Stock
Elections and Combination Stock Elections shall have effectively been
made would result in a number of shares of Acquiror Stock being issued
that is at least equal to the Minimum Stock Amount but does not exceed
the Maximum Stock Amount,
(1) the shares of Target Stock for which effective Stock Elections and
Combination Stock Elections have been made shall be converted into the
right to receive Acquiror Stock equal to the product of the Exchange
Ratio multiplied by the number of shares of Target Stock covered by
such Stock Elections and Combination of Stock Elections;
(2) the shares of Target Stock for which effective Cash Elections and
Combination Cash Elections have been made shall be converted into the
right to receive the Per Share Cash Consideration; and
(3) the Undesignated Shares shall be converted into the right to
receive the Per Share Cash Conderation.
(iv) Notwithstanding any other provision of this Agreement, if, after
applying the allocation rules set forth in the preceding subsections of
this Section 2.7(d), the aggregate value of the shares of Acquiror
Stock that would be issued pursuant to the Merger (valued at the
Average Closing Price) is less than 60 percent of the Total
Consideration or more than 70 percent of the Total Consideration,
Acquiror and Target shall be authorized to reallocate shares of
Acquiror Stock and cash among the holders of the Target Stock in good
faith and in such a manner as they reasonably determine to be fair and
equitable, or to vary the number of shares of Acquiror Stock to be
issued in the Merger, in a manner such that the number of shares of
Acquiror Stock to be issued in the Merger shall be not less than the
Minimum Stock Amount nor more than the Maximum Stock Amount.
(v) Notwithstanding any other provision of this Agreement (other than
Section 2.7(d)(iv) hereof), if any share of Target Dissenting Shares
fails to become Target Perfected Dissenting Shares, such Target
Dissenting Shares shall automatically be converted into and represent
the right to receive the consideration for such shares provided in this
Agreement, without interest thereon. The consideration payable
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for any such shares of Target Dissenting Stock shall be payable in
cash, in shares of Acquiror Stock, or in such combination of cash and
Acquiror Stock as shall be determined by Acquiror as being necessary or
appropriate to preserve the status of the Merger as a "reorganization"
within the meaning of section 368(a) of the Code.
(e) The calculations required by Section 2.7(d) shall be prepared by
Acquiror prior to the Effective Time and shall be set forth in a
certificate executed by the Chief Financial Officer of Acquiror and
furnished to Target at least two Business Days prior to the Effective
Time showing the manner of calculation in reasonable detail. Any
calculation of a portion of a share of Acquiror Stock shall be rounded
to the nearest ten-thousandth of a share, and any cash payment shall be
rounded to the nearest cent."
4. Subsection (c) is hereby added to Section 7.4 to read as follows:
"(c) In lieu of a substitute stock option provided in Subsection (b)
hereof, each optionee shall have the right to elect a cash payment instead
of such substitute stock option. Elections shall be in writing and
delivered to Acquiror no less than five Business Days prior to the
Effective Time. Upon a proper election, such electing optionee will be
entitled to receive, after the Effective Time, an amount of cash equal to
the product of (i) the Per Share Consideration minus then current exercise
price per share pretaining to such option multiplied by (ii) the number of
shares then currently exercisable pursuant to such option. No election
shall be permitted (and a substitute option shall be granted) if the cash
payment to result from such election would result in the Merger and the
other transactions contemplated hereby being taxable to the Parties or to
the shareholders of Target who receive Acquiror Stock.).
5. All references to a "pooling of interest" are eliminated from the Agreement
with it being the intention of the Parties to account for the Merger as a
"purchase."
6. Capitalized terms used herein and not otherwise defined shall have the same
meaning as set forth in the Agreement.
7. This Second Amendment may be entered into in one or more counterparts, all
of which shall be considered one and the same instrument, and it shall
become effective when one or more counterparts have been signed by each of
the Parties and delivered to the other Parties, it being understood that
all Parties need not sign the same counterpart.
8. Except as herein amended, the Agreement shall remain in full force and
effect.
9. This Second Amendment shall be governed by and construed in accordance with
the laws of the State of California.
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WITNESS, the signature of Acquiror, as of the 3rd day of August 2001,
set by its Chairman and attested to by its Assistant Secretary, pursuant to a
resolution of its Board of Directors, acting by at least a majority:
MID-STATE BANCSHARES
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman of the Board Assistant Secretary
WITNESS, the signature of Mid-State Bank & Trust, as of the 3rd day of
August, 2001 set by its President and attested to by its Assistant Secretary,
pursuant to a resolution of its Board of Directors, acting by at least a
majority:
MID-STATE BANK & TRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President Assistant Secretary
WITNESS, the signature of Americorp, as of the 3rd day of August, 2001
set by its Chairman and attested to by its Secretary, pursuant to a resolution
of its Board of Directors, acting by at least a majority:
AMERICORP
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Chairman of the Board Assistant Secretary
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WITNESS, the signature of American Commercial Bank, as of the 3rd day of
August, 2001 set by its President and attested to by its Secretary, pursuant to
a resolution of its Board of Directors, acting by at least a majority:
AMERICAN COMMERCIAL BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
President Assistant Secretary
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